Brad Garlinghouse, Ripple’s CEO, challenges the SEC’s incorporation of XRP quarterly reports in their legal action, prompting scrutiny over the lawsuit’s basis,
The chief executive of payment protocol and exchange network Ripple Labs, Brad Garlinghouse, has criticized the US Securities and Exchange Commission for allegedly utilizing the company’s quarterly reports regarding its native cryptocurrency, XRP, in the agency’s lawsuit against the cryptocurrency startup. In a tweet published on Wednesday, Garlinghouse made this claim and cited the company’s XRP quarterly report for the second quarter (Q2) of this year.
Ripple Attacks the SEC
The Ripple CEO explained in a tweet that the company started the reports to “voluntarily” share information on its XRP holdings. However, it is claimed that during the litigation process, the securities exploited them against the company.
“Despite being published in a good faith effort to be transparent, the SEC has used these quarterly reports as a weapon against the company. Ironic for a company that promotes openness and disclosure, Ripple added in its most recent quarterly report, which was made public on Monday. The company continued, reinforcing its dedication to openness, “Accordingly, Ripple is re-evaluating the role and contents of this report going forward and will have updates on that front in Q3 2023.”
John Deaton, a well-known attorney who has been outspoken on the SEC vs. Ripple case, also tweeted about the subject, saying that “the SEC used the transparency of these reports against Ripple and its two executives.”
According to Deaton, “Ripple was under no obligation to share this information as a private company.” Other businesses not only failed to disclose token sales, but also purposefully hid those transactions.
In a major decision on the SEC’s action against Ripple, US District Judge Analisa Torres found that the cryptocurrency company’s selling of XRP tokens to retain investors on public exchanges did not break US securities law, according to Finance Magnates. The court did point out that selling the token to knowledgeable investors constituted a violation of federal securities law. The decision came after years of litigation between Ripple and the securities watchdog in a dispute that began in December 2020.
Addressing ‘Misconceptions’ in Ripple
Meanwhile, Ripple addressed a number of “misconceptions” regarding the court decision in the XRP quarterly report that Garlinghouse cited, such as the notion that the verdict is a split decision and that XRP is a security in some circumstances but not in others.
The cryptocurrency company specifically addressed the perception that the decision was split, stating that the verdict “is a resounding win for Ripple and the industry more broadly.”
Furthermore, according to Ripple’s report, its ownership of XRP increased by almost 4.4 million from 5.51 billion as of March 31, 2023, to 5.55 billion by the end of June this year. As a result, at the end of June, there were 41.9 billion XPR total held in Ripple’s ledger escrows, down roughly 9 million from the previous month.